Tuesday, March 27, 2012

In the energy sector, the price of a barrel of oil isn't the only thing that's highly volatile. The future is too.

Here's a LINK to a recent piece in the Wall Street Journal where energy gurus Daniel Yergin and Vinod Khosla debate how quickly cleantech will begin to substantially supplant fossil fuels in the US.

This is Yergin responding to a question about the future, starting with a look back to the very recent past:

... [T]he world was going to run out of oil. It was peak oil. And we were going to be importing so much natural gas that we would be paying $100 billion a year to import natural gas. That was five years ago. The picture changed. The picture will change in five years.

and,

[Regarding national security], we've talked a lot about natural gas today. But what is also striking is what's happening in U.S. oil, with what's called tight oil and the development of that. You look at Canadian oil sands. You look at what's happening offshore of Brazil. And you see this kind of re-balancing of world oil going on, where probably 10 years from now the Western Hemisphere will be getting a lot less oil from the Eastern Hemisphere to begin with.

In case you couldn't tell, DOD Energy Bloggers like Dan and myself have a passion for cleantech and a more sustainable energy future for the US and the US military. But more than that, we put the interests and security of the country and the armed forces well ahead of our goals for new energy sources and energy efficiency.

I think you can hear in Yergin's response a sense that the world has just shifted, and that the US has moved quickly from a net energy importer to a potential energy exporter and that this condition may hold for the near and mid-term future.

Clearly, DOD's got to keep itself fully up-to-speed on the current version of the energy future and I believe it is. This re-balancing thing ... there's security in that. Andy Bochman

Friday, March 16, 2012

Apparently, last February’s attack on Sec Navy Mabus for
seeking an alternative to fossil fuels was not the work of a rogue numb
skull. It appears to be a trend among
House Republicans. Now REP Lamborn (R)
Colorado Springs feels he needs to remind SecNav what his mission is. He wants to be sure that the Navy knows its
mission is to keep the sea lines of communications open for the free flow of
oil rather than seek and alterative for that oil. Have we become so blinded by ideological
dogma that we can no longer take a strategic view? It does not seem worth entering the
fray. One of the great pieces of wisdom
I was given as a young man was that one ought not argue with idiots; they will
simple drag you down to their level and beat you with experience. Instead, I appeal to the people of Colorado
Springs. If you want a legislator to
question the military’s strategy, send someone with military qualifications. With Carson and AFA right there, surely you can do better. I am certain Mr. Lamborn is a fine lawyer, but
may lack the understanding that if we don’t have to put fleets in harm’s way to
protect Chinese oil, he, as “a strong advocate for our men and women defending our nation in the military” would be better serving those men and women.

In the event you haven't filled up the car recently, you might not have noticed the dramatic increase in the price of gasoline. I usually plan on spending about $200 a month
for gas. Last month it was $300. The $4.14 I paid in southern Georgia kind of
bit me. In 2012, DoD planned on spending
about $88 for a barrel of oil in 2012, and on 14 Mar 2012, the commodity
traded at $123.25 a barrel. For every
dollar above $88, it costs the Pentagon $31 million according to the DOD
Comptroller. The ASD, OEPP tells us that
DOD uses about 300K barrels a day, so one day’s replenishment on the 14th would
have cost DOD $10.5M over what they expected to spend…….THAT DAY! That money comes out of operations and
training accounts, services accounts and, eventually programs like new
equipment. Do you think that serves our
Soldiers, Sailors, Airmen and Marines well?
What are you doing about that, Mr. Lamborn? Perhaps all the loose talk about attacking Iran that has so thrilled speculators could ease up as well.

Senator McCain, a man I respect enormously, despite Game Change, has entered the fix. This week he took a swipe at Mabus, likening the efforts to another Solyndra. When someone of Mr. McCain’s military acumen starts down the road, it can clearly be identified as a Republican Talking Point. McCain wants to kill the program. Does he have an alternative? Not in evidence. Is it drill, baby, drill? This is like saying that heroin is too expensive; we need more dealers.

I wonder how these stalwarts would have reacted to DOD paying exorbitant prices in the ‘60s (relative to today) for microchips, just because the wanted a better, more secure way to communicate? Do you think they would have supported the satellite systems that gave us GPS? This hyperbolic, partisan naysaying serves no one.

So, Members of Congress, if you are really
concerned about the mission of the military, you can get off your dead butts
and pass a budget that will keep the military from having to suffer the brunt
of the sequestration. Rather than berating
the SecNav, get a national energy policy in place that funds research into
alternative fuels so that the world will not be beholden to vagrancies of
Middle Eastern oil merchants. The
current approval rating of Congress is 10%.
The current approval rating of the military is in the 80’s. Maybe, rather than trotting out your talking
points, you might inquire why the Navy, Air Force and Army are doing what they
are doing. You might learn
something. But I doubt it. Dan Nolan

Thursday, March 15, 2012

Yesterday I reintroduced the Operational Energy Strategy (OES) and gave a peek into the targets established in that document. Now, let’s break down the requirements of the Operational Energy Strategy Implementation Plan (OESIP) along
its timelines. Each of the targets is supported by specific requirements. Although designed for
long term impact, the plan has specific requirements in each of the remaining
quarters of 2012. I have added my
anticipated (hoped for) outcome of each of the requirements. The OESIP direct the production of A LOT of reports. It does not say how those reports will be
used.

In 2ndQFY12 the ASDOEPP will join forces with
the designee of the chairman of the Joint Chiefs of Staff, the Director for
Logistics, Lt. Gen. Brooks Bash to form the Defense Operational Energy Board
(DOEB). The DOEB will be responsible for
promoting operational energy security, overseeing the implementation of the
Strategy, and measuring Departmental success.
The charter for this board will be presented to, and approved by the
board this quarter….or in the next 13 working day.

Anticipated outcome: A mission statement detailing
responsibilities, authorities and how the DOEB will be held accountable.

Target
1:
Measure Operational Energy Consumption

The OESIP requires that “the Military Departments and
Defense agencies will report to the Defense Operational Energy Board (2nd
Quarter FY 2012) an operational energy baseline, using all available data on
actual energy consumption in support of military operations in FY 2011 and
projected consumption in FY 2012 – FY 2017”.
This will be a very busy 13 days!

Anticipated outcome: Finally, after 10 years of war, the
DOD will have a clear understanding for how operational energy is consumed by
system and mission type. Right?

In 3rdQFY12 the pace picks up with the
following deliverables. Here they are by target.

Services
and Agencies will provide reports concerning actions taken to improve
operational energy baselines reported in 2ndQFY12. Additionally, Combatant Commanders (CoComs)
will report to DOEB on plans to improve performance and efficiency within their
areas of responsibility. This presupposes that the CoComs have that data available.

Anticipated
outcome: A compendium of lessons learned from all the CoComs regarding success
in improving performance and increasing efficiencies for energy consuming
systems. The challenge will be in
transformation the anecdotal information into prescriptive wisdom. Otherwise it will be just pile of reports
gathering dust.

Target
3:
Promote Operational Energy Innovation.

Services and Agencies will report
to the DOEB on energy-related risks to
fixed installations.

Anticipated
outcome: A risk assessment that may then be prioritized for resource allocation
to address the most
critical, mission related energy insecurities.

Incorporate
Operational Energy into Modeling and Simulation: Services and Agencies will report to the DOEB
on how they are using or modifying analytic techniques and modeling and
simulation (M&S) tools to account for operational energy considerations in
force planning, capability gap analyses, and requirements development and
acquisition program-related analyses.

Anticipated
outcome: I assume that this is an
accountability measure to determine how (and if) the Services are executing
their mandated instructions regarding prioritization of energy in acquisition
decisions. And if they are not……?

Include
Operational Energy in the Requirements Process.
Once the Joint Staff issues policy for how to do this, then, through the
Joint Requirements Oversight Council, the Vice Chairman of the Joint Chiefs of
Staff (VCJCS) will oversee implementation of the effort to meet the
congressional intent of an energy performance attribute in the requirements
development process in individual programs. The Joint Staff, USSOCOM, and the
Military Departments will report overall progress in implementing an energy
performance attribute to the Defense Operational Energy Board.

Anticipated
outcome: This one is a twofer. The JS
has to issue policy on how to include OE in the Requirements process and then
reports can be produced on progress toward implementation. Or maybe the reports will be more
generalized…hard to report on policy implementation prior to policy
creation.

Apply Operational Energy
Analyses to Defense Acquisitions. In accordance with yet to be published policy
from the Under Secretary of Defense for Acquisition, Technology and Logistics
(USD(AT&L)), the Services will develop and apply Fully Burdened Cost of
Energy (FBCE) analyses throughout the acquisition process. The Military
Departments will report overall progress on implementing FBCE to the DOEB.

Anticipated outcome: Another
twofer. Unless the policy is already on
the street (please send copy if so), it will be nearly impossible to produce a
report on progress in implementation.

Finally, in 4thQFY12 the OESIP policies up the
battlefield and follows up on second quarter requirements.

Establish Departmental
Operational Energy Performance Metrics. The DOEB will develop Departmental
operational energy performance metrics to promote the energy efficiency of
military operations by the end of FY 2012. The Board may establish a working
group to develop these metrics, in consultation with the DoD Components and
based on the consumption baselines provided by the Military Departments and
Defense agencies (in 2ndQFY12).

Anticipated outcome:
Operational Energy Metrics!!!
Finally.

Target
3:
Promote Operational Energy Innovation.

Assess Departmental Energy
Science and Technology Gaps and Recommend Options. The Assistant Secretary of
Defense for Research and Engineering (ASD(R&E)) will identify investment
gaps in the Department’s science and technology (S&T) portfolio necessary
to reduce demand, improve system efficiency, and expand supply alternatives, as
articulated in the Operational Energy Strategy. ASD(R&E) will provide the
final report to the DOEB and include recommendations on possible options for
filling the gaps.

Anticipated outcome: A
prioritized list of identified S&T gaps that can be provided to Al Shaffer
and the gang at ASD (R&E) to set goals for DOD labs in energy work. I wonder how that will synch up with the $18M
doled out earlier this year for OE research to
over 8 DOD/DOE Labs?

Target
5:
Promote the Development of Alternative Fuels.

Establish a Departmental
Alternative Fuels Investment Portfolio. The Deputy Assistant Secretary of
Defense for Manufacturing and Industrial Base Policy (DASD(MIBP)) will present
to the DOEB a briefing on joint investments in alternative fuels using Defense
Production Act (DPA) authorities.

Anticipated Outcome: DOD
will finally have a grip on all the various alt fuel programs….but only those
sponsored under DPA. Are there others???

Adapt and Adopt Policy,
Doctrine, and Professional Military Education (PME) for Operational Energy. The
Joint Staff and Services will report to the DOEB on how policy, doctrine, and
PME will support reduced energy demand, expanded energy supply, and future
force development.

Anticipated Outcome: A clear
identifications of the shortcomings in policy, doctrine and PME that can
produce a prioritized list of specific actions necessary to correct those
shortcomings. This plan would be handed
back to the JS and Services for immediate inclusion in their own plans to
address shortcomings in everything else they do.

Incorporate Operational Energy into Combatant
Command Activities. As appropriate and consistent with annual classified
guidance to the CoComs, the Joint Staff and CoComs will report to the DOEB on
command measures to incorporate Operational Energy Strategy goals into theater
campaign plans, security cooperation initiatives, joint and combined exercises,
and other activities designed to achieve theater and country objectives.

Anticipated Outcome:
Sometimes the mere act of observation affects what is being observed. If you have to write the report, you have to
know what you are doing. If there is
nothing to report, you report that and what you are doing to fix it. This effort should provide the internal
planning guidance used by the CoCom or it should create it. Either is a good outcome.

Conclusion.

This 28 page
implementation plan for the 13 page strategy will disappoint many. For those who are for bold action, it is too
late. Bold action was necessary in 2001
when the Defense Science Board published its first findings on DOD energy. Bold action could have been taken in 2007 when
the Power Surety Task Force sent teams into FOBs and recommended game changing
strategies, some of which are bearing fruit today. With Operation Iraqi Freedom in the rear view
mirror and the rapidly growing popularity of an accelerated draw down in
Afghanistan, bold action is not in the card.
What the OESIP does is set the conditions for success in the
future. The reports the DOEB has directed will create
the base of knowledge necessary to develop the prescriptive wisdom that will
shape operational energy in future engagements. Even as the Rapid Equipping Force, PM-MEP,
and ARCIC continue to push the development envelop for OE, the ASD, OEPP is
working on the military we want, not the military we have. Dan Nolan

Wednesday, March 14, 2012

The much anticipated Operational Energy Strategy
Implementation Plan hit (floated to?) the street this past Friday, 9 March
2012. The SecDef took the time to put
his name on this one, so that might explain its timeliness. The diminutive document lays out short, mid and
long term goals and objectives but is best considered in terms of its timeline. This is a long post so I will
break it down over a couple of day.
Bottomline up front: It has an appropriate sense of urgency. DOD is drawing down from active combat, in
its budgets and in its ambition. Bold
action was needed when taking it would have been bold.
Now that everyone, including the C,JCS gets it, taking action is hardly
bold, but it is still necessary. The most significant pronouncement in the reprot is the formation of the Defense Operational Energy Board (DOEB) which brings the JCS in as partners in setting the conditions for OE efforts. Onward.

In June 2011, the Assistant Secretary of Defense for
Operational Energy Plans and Programs (ASD,OEPP) issued the DOD
Operational Energy Strategy (OES).
The second paragraph of the introduction read:

The DoD Operational Energy Strategy sets the overall
direction for operational energy security for the Office of the Secretary of
Defense (OSD), Combatant Commands, Defense Agencies, and Military
Departments/Services (hereinafter “DoD Components”). Within 90 days of the publication of this strategy, the Department
will release an implementation plan, which will include specific targets and
timelines for achieving this strategy in the near-, mid-, and long-term. Annual
updates to the strategy and implementation plan will include specific
performance metrics, as directed by section 138c. Together, these documents
will form the basis of the ASD(OEPP)’s annual certification of Departmental
budgets, as required by law.

Also true to their promise, it contains specific targets
and timelines and another promise of metrics.
Here is a synopsis of the specific targets to support
them. Timeline will be provided in the next post. The DOD operates on a Fiscal Year
(FY) calendar which begins on 1 October.
The year is broken into four quarters.
As of 13 March 2012 we are in the final month of 2ndQFY12.

TheOES has
three strategic goals. The OESIP has seven specifictargets associated with
each goal as well as a timeline to support.
Here is an overview of the goals and targets.

Strategic
Goal 1: The Department will reduce the overall demand for
operational energy and improve the efficiency of military energy use in order
to enhance combat effectiveness and reduce risks and costs for military
missions. To achieve this strategic
goal, the Department will measure its operational energy consumption; improve
energy performance in operations and training; and promote defense energy
innovation.

Strategic
Goal 2: The Department will diversify and secure military
energy supplies in order to improve the ability of U.S. forces to obtain the
energy required to perform their missions.
To achieve this goal, the Department will identify and remediate

Target
4:
Improve Operational Energy Security at Fixed Installations

Target
5:
Promote the Development of Alternative Fuels.

Strategic
Goal 3: To provide energy security and enhanced warfighting
capability for U.S. forces in the future, the Department will consider energy
security in strategic planning and force development.

In the next post I will break down the requirements of the OESIP along
its timelines. Although designed for
long term impact, the plan has specific requirements in each of the remaining
quarters of 2012. I will add my
anticipated (hoped for) outcome of each of the requirements. The OESIP directs the production of A LOT of reports. (11 Reports, many from multiple submitters). It does not say how those reports will be
used. The OESIP cost about $240K to produce. Maybe, by ordering in bulk, they can get the reports they have ordered more cheaply. Dan Nolan

Monday, March 12, 2012

Every time I attend a military energy conference dealing
with infrastructure energy, I always look around to see who is attending from
the utilities. Rarely do I find
anyone. This is a bad thing. DOD’s energy efforts are akin to coalition
warfare and the utilities must be part of the solution…..or they will be part
of the problem.

There are three countries in the world who have not
officially adopted the
metric system: the United States,
Liberia and Myanmar. Change is hard and
embracing a new paradigm is often frightening.
Similarly, there are four states
in the union that do not allow 3rd party power producers to sell
directly to a customer: Georgia, North Carolina, Kentucky and Florida. This means that a non-utility producer of
electricity can only sell to the utility.
The rate that the utility purchases the energy is called the “avoided
cost” rate.

In 1978, the Public Utility Regulatory Policy Act (PURPA)
required electric utilities to buy power from nonutility electric power
producers at the avoided cost rate, that is, the cost the utility would incur
if it were to generate or purchase power from another source. Each state translated this rate differently,
with some applying the short-run marginal cost—or fuel cost to produce power—and
others interpreting avoided cost to mean the long-run marginal cost of
power—the all-in levelized cost of the next plant to be built.

The reason this is important is because DOD’s plan to meet
the goal of 25% renewable energy by 2025 without expending billions of tax
payer dollars is to entice businesses to build the facilities on federal
installations. The business will pay the
government a lease for the land and produce renewable energy for which the
federal facility can claim credit. In
order for this to work, the commercial entity must sell the power through a
power purchase agreement at a competitive rate that creates sufficient return
on investment. In those locations where the
avoided cost is significantly less than the standard electricity rate the
business case cannot be made. But there
is hope!

In the state of Georgia, a piece of legislation is making
its way through the State House that would allow 3rd party power
producers to sell their power directly to the customer. The legislation (SB 401)
introduced in the Georgia Assembly this year would allow for such power
purchase agreements (PPAs). These agreements simply allow property owners
(homes, businesses, and bases too) greater flexibility in financing alternative
energy generation projects.

The utilities and coops are resisting these changes. They are concerned about the mayhem they
predict will occur if there are hundreds of distributed power generation sites
across the state. This might have been
true if someone had to physically throw a switch to divert or cutoff power, but
I am pretty sure we have figure out how to automate that process. I
suppose one might also look at this as a way to gain energy security and,
perhaps, another form of security.

Since the Base Realignment and Closure (BRAC) process began
back in 1988, over 350 bases have been close or realigned. Now there are calls for another couple of rounds of BRAC. Dr. Robyn, the Deputy Undersecretary of
Defense For Installations and Environment told a Congressional committee this
month that it was time to reduce the real estate holding again. This
was also a recommendation of the 2008 BRAC commission for another round in 2015.
Dr. Robyn is looking at European bases
as well, but with 100 already closed there and another 23 scheduled by FY15, it
might be time to look closer to home.

Dr. Robyn told the committee that the department “can do
more to consolidate our infrastructure with the goal of reducing long-term
costs while still supporting our operational requirements and strategic
commitments.”

Given that most of the low hanging fruit has been picked,
when bases are considered this time, might not energy security be part of the
criteria? If local utility regulations
prevent competitive business cases for building renewables with third party
investments, then the Services will have to put their own money into the
efforts or write off energy security as a criterion.

Given that the Army’s Energy Initiatives Task Force is
waiting around for the Corps of Engineers to get the comments back on their
draft RFP for renewables, maybe they could get involved in helping set the
conditions for success for bases like, Fort(s) Benning, Gordon, Stewart, Bragg,
Campbell, and Knox. The Georgia legislation would be a good place
to start. I am sure Moody and Robins AFB
would appreciate the cross Service help.

Simply having the authority to pursue innovative financing
in pursuit of energy security is not enough.
It is critical that the Services understand the business cases for the
projects. If business has a choice
between regulatory environments, they are going where the business case is best. I am sure the Services are loathed to get
involved with local legislation, but when the utilities begin to throw their
weight around, there needs to be a counter balance. The prestige of the Services and the esteem
in which they are held could help local legislators understand the criticality
of energy security. It might even
outweigh the campaign contributions and lobbying efforts of those that prefer
the status quo to a change in paradigm that creates jobs, business opportunity
and energy security. Dan Nolan

Friday, March 2, 2012

For 30 years, my father never voted. He was a career soldier from a family of
career soldiers. Until 1969, when he
retired from the U.S Army, he held the belief that a soldier should not vote for
the Commander-in-Chief. It was not
“seemly”. Once he retired, he not only voted but actively campaigned for
a presidential candidate. It was not a
political awakening as much as to help secure a Presidential appointment to the
United States Military Academy at West Point for his wayward, surfer son. It worked.
In 1972 I was appointed to West Point by Richard M. Nixon.

As a career soldier myself, I was my father’s son and held
true to his belief that it was unseemly to vote for the CINC, so I followed his
example. Of course, I was wrong; we are CITIZEN-soldiers. It is our duty to participate. That being said, in the military, one does not
talk politics. Ever. It is not only discouraged, it can be a
violation of the Uniformed Code of Military Justice to exercise command
influence over another service member’s vote.
When I retired, I did register to vote, but as the deputy supervisor of
elections for the fourth largest county in Florida, I felt that it was
important (in 2003) to appear as non-partisan as possible, so I registered with No
Party Affiliation.

My purpose here is not to extol the virtues of not having a
party affiliation, but rather to describe the non-partisan nature of the U.S.
Armed Forces. It is a violation of Defense
Department Directive 1344.10 to even appear in uniform at a political
event. So when I hear that our esteemed law makers
are accusing the military of being partisan in their pursuit of energy security
I cannot decide if I am more astounded by their ignorance or their
arrogance.

In another excellent Annie Snider article in Greenwire, Ms
Snider reported on a congressional hearing in which, Rep. Randy Forbes (R) from
the 4th District of Virginia teed off on SecNav Ray Mabus for the
Navy’s biofuels program. Sec. Mabus
thinks that if biofuels were a ready substitutes for petroleum based fuels, he
wouldn’t have to put two carrier groups (and America’s sons and daughters) in
harm’s way to ensure the free flow of said petroleum to the markets that buy
American goods. Rep. Forbes thinks it is
simply a way for the Administration to hide their energy policy (as if they had
one!). Of course it is worth considering
what Rep. Forbes is for, as well as what he is against (according to
Wikipedia):

To designate the United States as a
Judeo-Christian nation.

To declare that "the Holy Bible is God’s
Word".

To declare religion a prerequisite for freedom
and reject "the notion that the laws and Constitution of the United States
require the exclusion of God from matters of government".

To prevent the IRS from assisting the federal
government in an "invasion into the health care lives of American
citizens".

There is no energy independence, only interdependence and as
long as any nation is dependent on oil from the Middle East, the U. S. will
have to spend its treasure and blood to ensure freedom of the seas. This would not be so if all of our
transportation networks could use non-food, non-subsidized, non-petroleum based fuels
until we can achieve electrification (still looking for that flying car). The tactical move of buying as yet expensive
biofuels may have the strategic impact of broadening the market, driving down
costs and offering an alternative to Venezuelan light sweet crude. Would have thought that Rep. Forbes, a
sponsor of the H.R. 6260 entitled, "New Manhattan Project for Energy
Independence" would get that.
Pretty sure the government had a lot to do with the Manhattan
Project.

One of the other quotes in the article was from Ms. Catrina
Rorke of the American Action Forum, another one of the endless number of think
tanks in D. C.. These "institutions" are there to help us non-Beltwayers understand the intricacies of
getting nothing done. Ms. Rorke says,
“"Obama is hiding new renewable energy bets at the Pentagon, charging our
Defense Department with major investments in 'low-emissions economic
development' while cutting their budget by $5.1 billion,". Ms. Rorke, who has spent her entire five year
career inside the Beltway, first as a congressional aide and then as a proto-lobbyist,
appears not to have gotten the memo on
the nation’s current economic situation.
Or that the cuts to the DOD budget stem from the inaction of the very
group for whom she wishes to be the brain trust! BTW, it is President Obama. In a civil society, respect for the office, if not the person, is the norm. I was taught that at West Point; it may not have been part of the curriculum at UNC. These attempts to politicize energy security
are foolhardy as well as dangerous.
Frankly, I was surprise to see her quoted given her lack of
experience.

DOD is engaged in reducing their energy consumption and
finding alternatives because they have congressionally dictated mandates to do
so. They are planning for the
implications of climate change because it is prudent to do so for National
Security reasons. They are examining
alternative fuel sources because a reliance on a single source creates a
single point of failure. To ascribe
political motives is either craven, short sighted or stupid. Given the behavior of our Congress (and their brain trust), none of
those motives would surprise me. Dan
Nolan

BlogCatalog

StatCounter

RSS Feeds

Contributors

Sister Blog on Electric Grid Cyber Security

DOD Operational Energy

click logo for official home page

About

This blog tracks the energy challenges facing the US Department of Defense in the early 21st century. Drawing from the best thinking inside and outside the Pentagon, it examines problems and identifies possible short, medium and long term solutions in technology and policy.

Andy Bochman runs the DOD Energy Blog and can be reached at andybochman at gmail dot com